In order to address whether SCGB3A2 has any additional function than those already known such as anti-inflammatory and growth factor activities, in vitro and in vivo studies were carried out to determine for its role in fibrosis. In in vitro studies, SCGB3A2 was found to inhibit TGFbeta-induced differentiation of fibroblasts to myofibroblasts, a hallmark of the fibrogenic process, using pulmonary fibroblasts isolated from adult mice. This inhibition was through increased phosphorylation of STAT1 and expression of SMAD7, and decreased phosphorylation of SMAD2 and SMAD3. INFgamma is known to suppress fibrosis through the exact pathway as the one that we identified for SCGB3A2. Interestingly, STAT1 phosphorylation by SCGB3A2 takes about 3 hours to reach peak levels as compared to 10-30 min by INFgamma and requires protein synthesis, suggesting that the SCGB3A2 pathway may be different from the INFgamma pathway and mediated through an unknown SCGB3A2-specific receptor. INFgamma was recently used as a therapy to treat pulmonary fibrosis. However, it exhibits toxic side effects and thus a better alternative is desirable. In order to demonstrate the effect of SCGB3A2 on the TGFbeta signaling in vivo, a bleomycin-induced pulmonary fibrosis mouse model was used. Mice were administered bleomycin intratracheally followed by intravenous injection of recombinant SCGB3A2. Histological examination of lungs in conjunction with inflammatory cell counts in bronchoalveolar lavage fluids demonstrated that SCGB3A2 suppressed bleomycin-induced pulmonary fibrosis. Microarray analysis was carried out using RNAs from lungs of bleomycin-treated and normal mice with or without SCGB3A2. These results confirmed the in vitro results that SCGB3A2 affects TGFbeta signaling and reduces the expression of genes involved in fibrosis. This study suggests the potential utility of SCGB3A2 for targeting the TGFbeta signaling in the treatment of pulmonary fibrosis.